Renovations that don’t add value
More and more we are experiencing issues with lower than expected valuations, so if you’re planning on renovating your investment property, or just about to buy one that may need some TLC, here is a short list of renovations to avoid as they won’t do anything for the value of your property.
1. Overcapitalising
When you own a house in any given neighbourhood the worth of the entire area will affect the worth of your property. Make sure you’re keeping the value of your home right in the middle of the value range for the entire neighbourhood rather than making it the most beautiful house on the block. Value-wise, you’re better off being the worst house in the best street than the best house in the worst street, as the underlying land drives the value.
2. Intense/Overbearing Landscape
The problem with intense or overbearing landscaping is that the property looks like it requires too much work. No one wants to rent a property that is going to take a lot of upkeep or money to keep looking nice.
3. “Too-Trendy” Colour Palettes
Colour schemes go in and out of style quickly. You don’t want to ‘date’ your house with colour palettes that are trending right now. Instead, look for neutral colours that never seem to go out of style.
4. Swimming Pools
A pool may seem like a great idea, but the truth of the matter is that swimming pools are a liability. They are expensive to upkeep and they require extensive work as well. No one really wants the hassle of keeping one on their rental property.
5. High End Upgrades
You want the appliances in your rental property to work and to look decent at the same time, but you’re not going to be able to increase the rent because you spent $2,000 on a stove instead of $500. Your tenants aren’t going to notice or care how much the stove cost as long as it works and it looks reasonably good.
6. Improvements You Can’t See
Improvements to rental property should only be made when they are necessary or they will improve value by more than their cost. When you repair things that aren’t even visible such as plumbing or electrical, then you’re not adding value to the home. People expect the electricity & plumbing to work efficiently – they’re not going to pay more for it. The hidden things are not going to add value and they’re going to cost a lot. Cosmetic improvements, on the other hand, will attract tenants to the convenience, atmosphere and lifestyle and secure you a good tenancy quickly.
7. Carpeting Throughout
Carpeting may seem like a great idea and in some cases it may be. The problem is that carpet will begin to show wear and tear, it will begin to show stains and discolouration. Linoleum, tile or wood floors can be easier to clean and they show less wear over time.
There are always exceptions to the rule, but in general it’s fair to say that the items listed here are a sound guide to where money should and shouldn’t be spent when renovating a rental property.
